Business of Gaming - THQ/Ubisoft/38 Studios

By Dog of Thunder, 6 years ago
Welcome back to another round-up of the latest moves going on behind the scenes in the gaming industry. While this was not planned to be a weekly article, we are in a particularly busy time of year as companies are reporting on their fiscal year earnings as we move on into a new one. This week, it's success for Ubisoft, success for THQ and more bad news about 38 Studios.

Starting with the good news first, Ubisoft has posted profits for the last year. Yes, in a rare occurrence for a gaming company, Ubisoft made $47.7 million in profit. The bulk of this profit is from digital titles, in particular The Settlers Online, which is a PC-only title. Console games were also good for Ubisoft, however, with everything from Assassin's Creed: Revelations to performing well. Beyond the good news about a game company posting profits, there is nothing much to report, other than with Tom Clancy's Ghost Recon: Future Soldier kicking off the new financial year for them, Ubisoft is poised to improve over the course of 2012-2013.

Now we have slightly less good news and it is time for the ongoing issues with THQ to be discussed in purely financial terms. First off, Devil's Third is being sold off by THQ due to their profitability concerns. Devil's Third began life under one game engine and then had to be scrapped and re-built under a second one when the developer of the first engine went out of business. At this point, THQ will not spend more money on development and are seeking to cut their losses and get some of the millions they spent on this game back into their coffers.

The bad news is that THQ posted a yearly loss of $95.2 million. The good news is that a leaner, meaner THQ is actually well positioned to have a profitable year. The majority of the $95.2 million loss came from the uDraw tablet, which will go down as one of the greatest disasters in gaming history on this platform. and Saint's Row: The Third - Enter the Dominatrix look to give THQ a boost this year as the beleaguered company has dropped almost all of its licensed games and will focus on releasing just a few, polished, quality titles to get back on the road to profitability.

So, speaking of being "profitable" there was some more news this week regarding Kingdoms of Amalur: Reckoning developer, 38 Studios. Earlier this week, we reported that 38 Studios owed the state of Rhode Island the sum of $1.125 million dollars as the first payment on a $75 million dollar loan taken out in 2012.

On Thursday, 38 Studios sent over a check to cover this cost to the Rhode Island EDC (Economic Development Corporation) that was rejected because 38 Studios did not have the funding. In short, the check was bad and would have bounced had the EDC attempted to actually deposit it.

One day later, this past Friday, 38 Studios was able to successfully pay the $1.125 million it owed the Rhode Island EDC. A second payment, of $2.6 million will be due in early November. 38 Studios will no longer be able to acquire state money in the future and is, by the EDC's estimation, currently spending $4 million a month on game development. Governor Chaffee stated: "It's time for them to go out and get private capital funding."

While the drama surrounding 38 Studios this week has been a roller coaster ride, it seems things have calmed down for the time being. Though the infamous "Project Copernicus" MMO has nothing to do with the Xbox 360, here's the only bit of footage released for what has quickly become a financial burden of almost uDraw proportions:

Let's just say Kingdoms of Amalur: Reckoning has a very good chance of being the only Xbox 360 title developed by 38 Studios.

Regardless of what happens next week, there will be no business round-up as I will be celebrating my 6th anniversary with the Wife of Thunder.